Foundations of
marketing
Raf
Marketing
The management process which identifies ,
anticipates and supplies consumer
requirements efficiently and profitably.
● Consumers come first
● Focus on customer
Orientations
● Business objectives
Production orientation
● 19th century
● People will buy anything if cheap enough
● This paradigm prevails when demand
exceeds supply
● Communist countries
● Mass production
Product orientation
●
●
●
●
Feature focused
More complex products
Made by engineers and designers
Feature customer doesn't need
Sales orientation
● Used to get rid of supply surplus
● Customers can be fooled
● Persuade customers to buy more
Customer orientation
● Customers are intelligent
● Won't buy from if not good value
● Customer at center of organisations
activities
● Change organization to fit group of
consumer needs
Societal marketing
● Marketing should take responsibility for
needs of society at large
● Long term effects on society
● Products with immediate satisfaction and
long term benefits
Societal classification of products
Immediate satisfaction
Long run
consumer
benefits
Low
high
low
Deficient products
Pleasing products
High
Salutary products
Desirable products
Relationship marketing
● Life time value of customer
● Eg Renault making cars from first car to
sports car to family car taking an man
through his life
● Marketers responsible for entirety ,
establishing & maintaining relationships
● Creation of customer loyalty
Marketing can be seen in several ways
1. Moderating force in exchange process
2. Driving philosophy of business
3. Managerial function obtain consumer
responses
4. Dynamic operation analysis-> planning >action due to changing consumer
5. A catalyst for change
The & P’s of marketing
1.
2.
3.
4.
5.
6.
7.
Product: Fit for task what consumer expects
Place: Easily available near target group
Promotion: Advertising & PR emotive
Price: Represent good value for money
People: Services rely on people positive exp
Process: Silver service make it beautiful
Physical evidence: Positive environment
Key concepts of marketing
Managing exchange: This goes into promoting & advertising sales techniques. ensuring goods up to standerd..
Segmentation & targeting: The idea that people can be grouped according to their needs and devote resources to
meeting needs of the few groups rather than everyone.
Positioning: Create accurate perception of the brand , positioning is how you are seen by customers. The lens through
the customers see us.
Needs : Perceived lack of something eg need for enjoyment comes from nessicisity to eat food.
Wants:Need food , want burger the want for alternatives.
Demands: Potential customers who have the means to pay for the product.
Product: The bundle of benefits.
More key concepts
Publics: Influence in marketing organisation monitoring and adjusting activities.
Markets: potential buyers of firms products.
Factors causing marketing resistance
●
●
●
●
●
●
Lack of leadership which is committed to marketing concept.
Lack of suitable organisational infrastructure.
Autocratic leadership for senior staff.
Inherent mistrust by individuals in position of power.
Preference for production, product or sales orientation.
Transactional approach to business rather than encouraging return.
The marketing environment
The external environment: Anything that happens outside the
organisation.
Two ways of dealing with environmental forces
1. Reactive management: Factors uncontrollable , act after event.
2. Proactive management: Factors common to society as a whole.
Macro environment
●
●
●
●
●
●
●
●
Factors common to the society as a whole.
Socio cultural factors
Gov legislation
Forign competition
Exchange rates
Climate changes
Demographic factors
Economic factors
Micro environment
●
●
●
●
●
●
●
Competitors
Company warehouse
Availability og skilled employees
Customer base
Intermediaries
Customers
Location
SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
Michael porters 5 forces model
1. The greater power of suppliers the stronger the competitive
pressures.
2. The bargaining power of consumers: The stronger the more
competitive.
3. Threats of new entrants: More entrants = more competitive
4. Threats of substitutes: Difficult to see until too late
5. The rivalry amoung competitors: Dont tread on toes ,
Oligopolistic market.
Types of publics
Governmental publics:Local , national , international agencies that
restrict the companies legislation eg setting interest rates and fixing
exchange rates. Can be influenced by lobbying and trade associations.
Media publics: Press radio , TV can create positive brand through
broadcast.
Citizen action publics: Pressure groups , eg green peace consumer
rights groups.
The international environment differs…..
●
●
●
●
Cultural differences, communication tools need to be adapted.
Marketing segmentation issues are more likely to be geographically based.
Remoteness of markets make monitoring more difficult.
Difference in logistics different structures in oversea markets.
Culture
Ethnocentrism: States that marketers believe
that their own culture is “right”
Public relations is about creating favourable
impressions with all company publics.
Consumer decision making
Problem definition
● Consumer finds when stock of goods is used
up.
Information search
Internal search - remember previous
experiences about products.
External search - Involves shopping around ,
and talking to people.
Evaluation of alternatives
● Create an evoked set.
● Signals , price tag.
● Cut offs maximum and minimum values acceptable.
● Heuristics- decision making rules (see next slide)
INterupts - points whereby search is interrupted
1.
2.
3.
4.
Environmental stimuli , in store promotions
Affective states , Physiological needs eg hunger
Unexpected information , change in shop layout
Conflicts , when original decision cannot be followed
Heuristics (desicion
making rules)
1. Search heuristics rules for finding out
information.
2. Evaluation heuristics judging product
offerings.
3. Choice heuristics decision making rules.
Purchase
● Locate brand pay with appropriate method.
Post purchase evaluation
●
●
When customer decides if purchase was a success or not.
Comparison with what consumers expected.
Customer expectations:
1.
2.
3.
●
●
Equitable performance, reasonably expected for the price.
Ideal performance , What consumer hopes it will do.
Expected performance , what product will probably do.
Post purchase dissonance: Product not live up to expectations.
Post purchase consonance: When product does better or expected.
Consumers will usually try to reduce dissonance in 3 ways
1.
2.
3.
4.
Ignore dissonance , focus on positive.
Distort info , tell self a lie , eg it was a cheaper version thus not as good.
Play down importance of the issue.
Change one’s behaviour.
Consumers display dissonance in 3 ways
●
●
●
Third party responses , complaint to organisation or governing bodies.
Private responses , consumer complaints too friends.
Voice responses come back to shop and complains.
Compensation should be allocated by
1. Strength of complaint.
2. The degree attached to supplier from
customers viewpoint.
3. The legal & moral relationship between the
supplier and the consumer.
Divestment
● After product has been used.
● Tin can in bin.
● eg take used car to auction.
Perception
The cognitive map of the world is affected by
●
●
●
●
●
Subjectivity - existing worldviews on individuals.
Categorisation - Items grouped , info chunked.
Selectivity - Refers to selective attention of the brain.
Expectation - Interpreting into specific ways.
Past experiences - Interpret into light of previous knowledge law of
primacy.
Influences on buying decisions
Personal factors:
●
●
●
Demographic factors: age ; gender ethnicity.
Situational factors : eg pay rise , new car.
Level of involvement: degree of importance attached to product.
Varying consumer attitudes caused by:
Valence , Positive or negative attitude
Extremity , strength of attitude
Resistance , the degree to how much attitudes change over time
Confidence , The level that consumer believes attitudes are correct.
Physiological factors in Buying
●
●
●
●
●
Perception , marketers able to fill gap in communication process.
Motives , external force encouraging someone towards a particular course of action.
Ability and knowledge , better to add knowledge rather than aim to reconstruct.
Attitude , cognition , the conscious thought process.
Personality, traits & behaviours that make a person unique they change slowly.
Social factors that
influence consumers
● Normative compliance - pressure to conform
● Value expressive influence - need for
physiological association with group
● Informal influences- need to seek info
Main Groups
●
●
●
●
●
●
●
Primary groups - people most often family friends.
Secondary groups: People see sometimes , eg golf club friends
Aspirational groups - Groups you would like to be associated with eg celebrity
Dissociative groups - groups consumer would not want to be associated with.
Formal groups - Recorded membership and fixed rules.
Informal groups - less structured based on friendship.
Automatic groups - Groups by virtue of race ,age gender , ethnicity.
Impulse Buying
Pure impulse: based on novelty of the product.
Reminder impulse: remember something left off list.
Suggestion impulse: Product that meets unique need.
Planned impulse: Aim for one thing but allowed two have mind changed.
Industrial buying behaviour
●
●
●
●
●
●
Bigger order in terms of finance and quantity.
Reciprocity in orders.
Fewer buyers.
More people in terms of decision process.
Fewer sales in terms of deals.
More complex buying & negotiating techniques.
Description ---> Inspection ----> Sampling ---->negotiation
Decision making units
Gate keepers: Securities that keep flow of information away from the decision makers , main
aim to prevent sales people and allow the decider to work peacefully.
Influencers: Have ear to the decision makers eg children , spouse , golf partners.
Users: Actually use product eg I.T department.
Deciders: The ones who make the decision, hardest to influence , the real power in decision
making.
Buyers: given the task of going through the process of buying generally little room to negotiate.